Questions about starting an online store

This is a discussion on Questions about starting an online store within the FFL Dealer Discussion forums, part of the Related Topics category; I am interested in starting an online store but i am unsure quiet how it works. I want to buy wholesale on an as needed ...

Questions about starting an online store

I am interested in starting an online store but i am unsure quiet how it works. I want to buy wholesale on an as needed basis so that i dont have to keep merchandise on hand. Is this even possible to do? If so, any suggestions?

It is possible but there is a lot of compitition out there and the margin on firearms is not much. I don't say this to discourage you but getting a real working retail website up and running is a big undertaking unless you are knowledgable of such matters. Being able to accept credit cards is nearly a must in todays economy and everyone wants their item as soon as possible. Be vary cautious in dealing with credit card (murchant services) companies. You can get had in secounds and be liable of years of payments, fees, surcharges, chargbacks and equipment costs. Getting your 01-FFL is not difficult at all. Getting your vendors setup is another matter entirely. Of course you can use Gunbroker, Davidsons and a host of others to market your wares. Sales tax permits (where applicable) are a must as well as a local business license which is almost manditory for getting a FFL and a Employeer Identification Number (EIN) even of you have no employees in order to comply with federal regulations and open a bank account.

If you look through the threads in this forum you will find a post of how I started. I will be happy to try to answer any questions you may have. I am making a little money and selling a few firearms. Perhaps the most rewarding part of this is working with people on a one-on-one basis, face to face. I only sell by appointment so I can give a customer the attention they deserve in choosing a handgun since that is all I deal with other than the occasional accessorie. I do sell and customize rifles (AR) and normally get the customer physically involved in the installation of accessories. In reality, it is their rifle and they should know every aspect of it.

thanks

Your reply is very helpful and i have read the previous post but still have unanswered questions. I am looking to sell mostly class 3 weapons and eventually maybe do some gunsmithing involving cerakote finishing. I am a total begginer at all of this so step by step instructions are necessary. i do have a business licence and an EIN # from an existing business. Im trying to find out if im doing an online bunshop from my existing business if it is zoned right. trying to get all of the info before I filke for my FFL and have a viable plan.If You have more information i would greatly appreciate any you will give. My personall email is bandwickstiger2@yahoo.com. Thank you for your reply

I don't have any knowledge or experience as to the legality of selling firearms, but PLEASE talk to your CPA about the tax implications. Online sales can get tricky when sales tax is involved, and if you don't know right off the bat what and who you're responsible to pay you can end up with thousands of dollars in penalties and interest. I've seen it happen to way too many well-intentioned small business owners.

Other than that, good luck with your endeavor! Helping people start new small businesses is my FAVORITE part of my job. Entrepreneurship is in my blood

ETA: Going to your local SBDC would probably open up a lot of resources, too. Most of the time they are at a business school and consultations are free. https://www.tsbdc.org/

I spoke with the Tn Dept of Revenue they told me that i only have to pay taxes on items bought here in my state, on out of state purchases i dont have to do anything but report the dollar amount to them of the items purchased. They said i dont have to pay sales tax to any other state or do anything else, does anyone ahave any knowledge of this?

I spoke with the Tn Dept of Revenue they told me that i only have to pay taxes on items bought here in my state, on out of state purchases i dont have to do anything but report the dollar amount to them of the items purchased. They said i dont have to pay sales tax to any other state or do anything else, does anyone ahave any knowledge of this?

IN KENTUCKY... If I buy from a wholesaler in another state [who has a copy of my retail sales tax permit] I will pay no sales tax on the purchase. However when I sell the item [in Kentucky] I would collect 6.00%of the total sale and pay it to the Kentucky Department of Revenue. Now if I do the same thing but I subsiquently sell the item to a dealer in another state, I would have to have a copy of their State Sales Tax license [typically a standard state specific "blanket purchase" form indicating they are exempt from pay sales tax on purchases] then they sell the item and collect the sales tax for their state.

lzy_grace is right. Sales tax is a booger. But if you keep your ducks in a row you will not have any problems. Economic conditions being what they are however the collection of state sales tax is low-hanging fruit for revenue and scrutinization of interstate sales is a wide open avenue to finding more revenue. Kentucky is pretty much middle of the road on sales tax. They don't bother you unless you mess up. By far the worst thing you can do in Kentucky is pay sales tax late. One day late will get you a fine which is a precentage of the tax owned, the tax owed and a penalty fee for filing late. You might owe say, $10.00, but if it is received it will cost you something like $0.20 + 10.00 late fee and a $5.00 penalty = $15.20 + the original $10.00 for a nice total of, $25.20.

The big hangup you may encounter is that some of the wholesalers or manufacturers may require a contract whereby you guarantee to buy x amount of product per year. I just don't see how doing it on an as needed basis would be profitable. The main reason is the shop that spends 10 thousand a year on product is not going to be happy if they find out the distributor is selling to you at the same discount but you are only buying 500 bucks a year. I know because I used to raise cain with my distributors for doing just that. They would sell to a private individual that was running a business out of their garage and the rest of us were paying brick and mortar rent.

The big hangup you may encounter is that some of the wholesalers or manufacturers may require a contract whereby you guarantee to buy x amount of product per year. I just don't see how doing it on an as needed basis would be profitable. The main reason is the shop that spends 10 thousand a year on product is not going to be happy if they find out the distributor is selling to you at the same discount but you are only buying 500 bucks a year. I know because I used to raise cain with my distributors for doing just that. They would sell to a private individual that was running a business out of their garage and the rest of us were paying brick and mortar rent.

Ever been in the HVAC business? This is exactally how, Trane, American Standard and several others work. And.. This is exactally why you see long-time Trane and American Standard dealers moving to Bryant and other brands. Ran into a local HVAC/R distributor selling refrigeration equiment to the end user at the same price I as a retailer/installer was buying it for. So the end user would get it wholesale and have me install it and if there was a problem with the equipment I have to fix it free or suddenly become the bad guy for trying to make a living.

Manufacturers would soon find themselves out of business if they only sold to the end user. The reason being is that their market is limited to only those that are willing to buy their brand. Some manufacturers will repackage the same product but under a different name and sell to the big box retailers. I was a small business and am not anti small business but it becomes very difficult to stay afloat paying rent, utilities, taxes, insurance and all the other aggravations of being a brick and mortar when the manufacturer sells the same discounted stuff to the guy selling out of the garage. If I could figure out a way to reduce my overhead to .03% I could put walmart out of business.